First Busey Corp expects to breach two of its financial covenants, and to report a third-quarter net loss due to higher provisions for bad loans, sending its shares down 7 percent.
The Urbana, Illinois-based bank holding company does not expect to be in compliance with the covenants for the next two quarters and said it was in talks with lenders for a possible waiver.
The company sees third-quarter net loss between $62.5 million and $67.5 million, not including any potential goodwill impairment charges.
First Busey said in the filing that it would aggressively write down problem loans in its Florida commercial loan portfolio and would set aside $120 million to $125 million in the quarter as provision for bad loans.
The company also said it would offer 18 million common shares and $39.3 million worth of its convertible preferred stock in efforts to raise its capital levels.
Shares of the company were trading down 12 percent at $5.70 in early morning trade on Nasdaq.
(Reporting by Sweta Singh in Bangalore; Editing by Ratul Ray Chaudhuri)